2015 TMT Predictions

In-store smartphone payments take off, but don’t take over, and enterprises lead in adopting new technologies

Bucharest, 20 January 2015 –This year in-store smartphone purchases worldwide will increase by more than 1,000% from last year. While the mobile wallet won’t replace the traditional wallet yet, 2015 will be a tipping point toward wider consumer adoption of in-store smartphone payments. This is according to the 14th edition of Technology, Media & Telecommunications (TMT) Predictions, a report by Deloitte Touche Tohmatsu Limited (Deloitte Global), providing a 12-18 month outlook on key trends in the TMT industry worldwide.

“Smartphones are already being used to check balances, transfer funds and transact online, but they have not reached a ‘mobile wallet’ status more widely,” said Ahmed Hassan, Country Managing Partner and TMT Industry Leader Deloitte Romania. “We predict 2015 will be the first year that all mainstream mobile requirements will be addressed, making smartphone payment options easier, with user friendly security in place. In Romania, after the launch of M-Pesa by Vodafone it is likely that in 2015 both Orange and Telekom Romania will also enter financial services and offer mobile payment solution plus others services.”

Deloitte Global predicts that print books will continue to dominate the publishing industry and account for 80% of all book sales by dollars and units, and that 2015 will be the year where enterprise will be ahead of consumers for adoption of new technologies such as 3D printing, Internet of Things (IoT) and drones.
Also, counter to previous industry predictions around the smartphone reaching a plateau, Deloitte Global predicts there will be one billion upgrades in 2015, signaling that the market has not yet matured or stagnated.

Consumers don’t always lead the way: The pendulum swings back to enterprise innovation

Last year signaled a shift away from a decade-long trend of consumerization of Information Technology (IT), for example, with a modest consumer uptake of wearable technology like smart glasses. In 2015, however, Deloitte Global predicts the pendulum to swing further toward enterprise led adoption with wearables, 3D printing, drones and the IoT meeting more needs and generating higher sales for business than consumers.
Additional highlights and details of this year’s TMT predictions to impact the marketplace in 2015 include:

Technology
• The end of the consumerization of IT? In 2015, the pendulum of technology adoption will begin to swing back to the enterprise market, reversing a decade long trend that went the other way - when mass adoption of technologies like large screen smartphones and tablets started with consumer adoption first.
• The Internet of things really is things, not people – In 2015, over 60% of the one billion global wireless IoT devices will be bought, paid for and used by enterprises - despite media focus on consumers controlling their thermostats, lights, and appliances (ranging from washing machines to tea kettles). The IoT-specific hardware is predicted to be worth $10 billion, but the big story is the enterprise services enabled by the devices: about $70 billion.
• Smartphone batteries: better but no breakthrough – Longer battery life is likely to remain a key factor for consumer’s choosing their next smartphone.

Media
• Short form video: a future, but not the future, of television - The total time spent watching online short-form video clips and other programming of less than 20 minutes in length will represent less than 3% of all video seen in the year globally. Deloitte Global does not expect short-form online content to usurp long-form traditional television. It is a future, but not the future, of screen-based entertainment; and Deloitte Global predicts it is unlikely ever to be the predominant video format, as measured by hours watched or revenues.
• The ‘generation that won’t spend’ is spending on TMT – North American Millennials will lead the way in 2015 and spend an average of $750 per person for content, both traditional and digital. What are Millennials spending on? Pay TV, music, computer games, books, live sports, streaming video, and even print newspapers.
• Print is not dead, at least for print books – Sales from print books will be five times the sales of eBooks. eBooks have not substituted print books in the same way that sales of CDs, print newspapers and magazines have declined. Young people (age 18-34) are as attached to print books as their elders and read at about the same rate than older demographics, and they are willing to pay for them.

Telecommunication
• Contactless mobile payments (finally) gain momentum-The end of 2015 will mark the tipping point for the use of mobile phones for in-store payments around the world. It will be the first year in which the multiple prerequisites for mainstream adoption – satisfying financial institutions, merchants, consumers and device vendors – have been sufficiently addressed. In 2015, about 10% of the base of smartphones worldwide will be used to make an in-store payment at least once a month, compared to less than half a percent (led by early adopters in Japan) of about 450 million smartphones in mid-2014.
• For the first time, the smartphone upgrade market will exceed one billion. 1.35 billion smartphones will sell worldwide in 2015, but over a billion of them will be upgrades – new phones for those who already have one. The upgrade cycle may be lengthening, but screen size, speed, storage, software and design will continue to drive growth for smartphone refreshes.
• The connectivity chasm deepens as gigabit Internet adoption rockets – Globally, the number of homes with broadband Internet will grow by about 2% to 725 million, and average broadband speeds in most countries will increase by 20%. The gap between those with access to the fastest broadband speeds and those on basic speeds will continue to widen in 2015, providing a varied experience from home to home, especially for high bandwidth applications like streaming video. All broadband is equal… but some is more equal than others.

About the TMT Predictions
The TMT Predictions are based on worldwide research supported by in-depth interviews and input from Deloitte member firm clients, Deloitte alumni, its industry analysts, leading TMT executives, and thousands of Deloitte member firm TMT practitioners across its global network. The focus of Predictions varies from year-to-year, but one theme appears constant: the impact of TMT on our behavior steadily deepens. Full details about the global TMT Predictions are available here: http://www.deloitte.com/Predictions2015.

In Romania, the services are provided or supported by Deloitte Audit SRL, Deloitte Tax SRL, Deloitte Consultanta SRL, Deloitte Fiscal Representative SRL, Deloitte Tehnologie SRL, Deloitte GES Support Services SRL and Deloitte Shared Services SRL. Deloitte is one of the leading professional services organizations in Romania providing, in cooperation with Reff & Associates, services in audit, tax, legal, consulting, financial advisory, risk advisory, business processes and technology services and other related services with more than 1100 professionals. Please see www.deloitte.com/ro/about to learn more about our global network of member firms.